Corn closed the week 6 ¾ cents lower. Private exporters announced sales of 1,567,000 metric tons (mts) of corn to China and 182,880 mts to Mexico.
In the weekly export inspections report, U.S. corn exports last week were 37.9 million bushels (mb), down from the previous week's 48.9 mb and were the second-lowest of the last 11 weeks. They were better than last year's same-week exports of 28.4 mb. Cumulative export inspections of 1.347 billion busehls (bb) are down 19.5% from last year's 1.672 bb. Corn exports will need to average roughly 38 mb per week during July-August in order to reach the USDA's 1.775 bb export program.
In the weekly crop progress and conditions report, U.S. corn crop conditions fell 2% to 71% good or excellent versus 72% expected, 73% last week and 57% last year. Only 10% of the crop is silking, slightly behind the average of 16%. Eastern corn belt conditions declined with Illinois down 6% to 61%, Indiana down 3% to 60% while Nebraska lost 2% to 74%, Missouri improved 1% to 69%, Iowa was unchanged at 85%, South Dakota up 2% to 82%, North Dakota up 5% to 72% and Minnesota up 1% to 85%.
In the weekly Energy Information Administration report, U.S. ethanol production rose for the tenth consecutive week to 914k barrels/day (269 million gallons per week) from 900k bpd (265 mil gal per week) the week prior and reflected a 12.7% decline from last year's same-week production of 1.047 million bpd (308 mil gal per week). Ethanol stocks rise to 20.6 million barrels in the week ending July 3 versus 20.2 million the previous week and 23 million the previous year. Estimated corn use for ethanol production was 92 mb, versus 90.6 million the previous week and versus 104.4 million the previous year.
The July World Agricultural Supply and Demand Estimates (WASDE) report showed U.S. corn ending stocks for 2019/20 at 2.248 bb versus the average trade estimate of 2.287 bb. This was an increase of 150 mb as the USDA cut ethanol by 50 mb and lowered US feed/residual usage by 100 mb. 2020/21 ending stocks were seen at 2.648 bb versus the average estimate of 2.715 bb. Ethanol demand was left unchanged at 5.200 mb, a number that is likely too high given the change in driving patterns due to COVID-19. The U.S. corn yield was estimated at 178.5 bushels per acre unchanged from last month with total production estimated at 15.000 bb versus the average estimate of 15.065. World ending stocks for 2019/20 were reported at 312.0 mts and 2020/21 ending stocks were reported at 315.0 mts.
Strategy and outlook: Producers should have sold the latest rally, including multiple years of production. At a minimum, put options should have been purchased to lock in a minimum price level.
Soybeans closed the week 7 ½ cents lower. Private exporters announced sales of 264,000 mts of soybeans to China for 2020/21.
In the weekly export inspections report, U.S. soybean exports were 19.2 mb and an eight-week high. However, this week's exports were still solidly below the roughly 24.5 mb per week they will need to average over the final 8 weeks of the 2019/20 marketing year in order to reach the USDA's 1.650 bb export projection. Cumulative export inspections of 1.372 bb are now down 1.4% from last year's 1.391 bb.
In the weekly crop progress and conditions report, U.S. soybean crop conditions were unchanged at 71% good or excellent versus 70% expected, 71% last week, and 53% last year. 31% of the nation's crop is blooming, ahead of the average of 24%. Eastern soybean belt conditions slipped with Indiana down 2% to 62%, Illinois down 5% to 63%, while Missouri was unchanged at 63%, Iowa up 1% to 84%, Minnesota up 2% to 83%, Nebraska up 1% to 76%, South Dakota unchanged at 80% and North Dakota lost 1% to 69%.
The July WASDE report showed U.S. soybean ending stocks for 2019/20 at 620 mb versus the average estimate of 588. The USDA cut exports by 25 mb. 2020/21 ending stocks were seen at 425, up 30 mb from last month. The soybean crush estimate was raised to a record large 2.160 bb with exports unchanged from last month. The U.S. soybean yield was estimated at 49.8 bushels per acre, unchanged from last month and slightly below estimates. Total production was estimated at 4.135 bb versus the average estimate of 4.157 bb. World ending stocks for 2019/20 were reported at 99.7 million tonnes and the 2020/21 ending stocks were reported at 95.1 mts.
Strategy and outlook: Producers should have sold the latest rally or at a minimum, bought put options to lock in a minimum price level protection.
For the week, Chicago wheat closed 43 ¼ cents higher, Kansas City wheat closed 20 cents higher and Minneapolis wheat 16 cents higher. Egypt bought 230,000 mts of wheat from Russia. Also, private exporters announced sales of 190,000 mts of HRS to China and 130,000 mts of HRW to China.
In the weekly export inspections report, U.S. wheat exports last week were the lowest of the first five weeks of the 2020/21 marketing year at (12 mil bu and well below last year's same-week exports of 23.1 mil bu. Cumulative export inspections of 86 mb are now down 11% from last year's 96 million following this week's poor performance, with shipments needing to average roughly 17.3 mb per week over the course of the marketing year in order to reach the USDA's 950 mb export projection.
In the USDA weekly crop progress and conditions report, U.S. winter wheat conditions dropped 1% to 51% good/excellent versus 52% expected, 52% last week and 64% last year. U.S. spring wheat conditions improved 1% to 70% good/excellent versus 70% expected, 69% last week and 78% last year. Minnesota lost 3% to 77% while North Dakota improved 2% to 61% and South Dakota improved 1% to 68%. 63% is heading versus 68% on average.
U.S. winter wheat harvest moved to 56% complete versus 56% expected, 41% last week, 42% last year and 55% average. Missouri is 86% complete, Kansas is 80% done, Illinois is 82% done with Nebraska only 16% complete. Oklahoma is finished and Texas is 98% finished.
U.S. spring wheat conditions fell 6% to 69% good/excellent versus 75% expected, 75% last week and 75% last year. Minnesota lost 1% to 80% good or excellent, South Dakota lost 10% to 67% and North Dakota lost 10% to 59% good or excellent.
The July WASDE report showed U.S. 2020/21 wheat ending stocks at 942 mb with HRW stocks at 423 mb and SRW stocks down to 103 mb while HRS stocks were pegged at 270 mb. The 2019/20 world ending stocks were reported at 297.1 million tonnes and the 20/21 ending stocks were reported at 314.8 million tonnes. US 2020 wheat production was lowered slightly by 53 mb to 1.824 mb with the spring wheat crop estimated at 502 mb.
Strategy and outlook: Harvest has reached the 50% completion and then the market focus has turned to a possible post-harvest rally. The COT report has turned decidedly bullish and Chicago wheat has responded positively. Use supply rallies to sell out of inventory.
Last week, live cattle closed 12 cents higher while feeder cattle closed 15 cents lower.
Last week, light to moderate fed cattle trade in the North occurred at mostly $95 to $97 live and $155 to $160 dressed - steady to $7 higher. Active trade in the South at $93 to $95, with the largest volume at $95 - mostly steady to $1 higher than last week.
The Fed Cattle Exchange Auction had 1,390 head listed for sale. 659 head sold at $95 to $95.25 all from Kansas.
The latest USDA steer carcass weights were up 6 pounds compared to the prior week at 896, making them 42 pounds above last year.
Last week's net beef sales of 9,500 mts was reported for 2020 with shipments of 15,100 mts.
In May, total exports of fresh, frozen and cooked beef for the month were 62,121 mt, down 31% from the same period a year ago. This was the lowest monthly beef export volume since March 2015.
Strategy and outlook: The market is looking ahead at the re-opening of the economy and with the increased slaughter capacity, backed up supplies are slowly being worked through. Producers should have implemented option strategies to lock in the latest rally that will protect the downside and allow for additional upside potential in the summer and fall months.
Lean hogs closed the week 70 cents higher.
Iowa/S. Minnesota weekly hog weights for week ending July 4, saw a drop to 283 pounds from 284.5 pounds last week versus 280.2 pounds a year ago.
This week's net pork sales of 31,500 mts with shipments at 33,500 mts.
Total U.S. pork exports in May were 208,472 MT, up 21% compared to a year ago. All the increase in port exports was due to China demand. Total shipments to China in May were 86,396 MT, a 347% increase compared to the previous year —accounting for 41% of all US pork export shipments.
Strategy and outlook: Producers should have used rallies to lock in values as the increasing weights and backlog of supplies will limit the upside potential of the hog market.